Lawyers Get More Than Plaintiffs in Excessive Fee Case

The court in Tussey v. ABB Inc. has awarded attorney fees roughly equal to the total damages assessed in the excessive fee case — but it won’t come close to covering their costs.

According to an analysis by Proskauer Rose LLP, the court awarded class counsel $11.7 million in attorneys’ fees and affirmed its earlier award of $2.28 million in costs and class representative awards.

The court explained that the defendant, in its view, “was not merely negligent but rather motivated by self-interest,” and the case made a “significant, national contribution” toward educating “plan administrators, the Department of Labor, the courts and retirement plan participants about the importance of monitoring recordkeeping fees and separating a fiduciary’s corporate interest from its fiduciary obligations.”

In so doing, the court also rejected defendant’s argument that the fee award was disproportionate to the $13.4 damage recovery because defendant had spent $42 million in attorneys’ fees defending the case, and that “[t]ying Plaintiffs’ counsel’s fees to a percentage of the monetary recovery would unfairly deprive them of compensation for the time spent successfully litigating important claims and issues.”

Tussey v. ABB Inc. was a long-running suit alleging that ABB failed to monitor recordkeeping fees and improperly mapped participants’ investments. In the most recent iteration (the ABB case was initially filed in 2006; the district court issued its ruling in 2012), the court found the ABB defendants breached their ERISA fiduciary duties when making a fund menu mapping change. But since the plaintiffs failed to provide damages calculations consistent with the 8th Circuit’s narrow mandate, the court gave the “win” to the defendants.

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